American motorists are paying a five-figure premium on used car purchases as inflation rattles the US economy this summer, recent research revealed.
In June, listing prices for used cars were $10,046 higher than what they would be under normal market conditions, according to a report conducted by CoPilot, an online used car marketplace. The dollar increase marked a 43% uptick compared to projections for this time of year.
“Despite economic headwinds caused by inflation, interest rates, and fuel prices, the continued inventory shortage in the new market, as well as strong consumer demand, are driving overall used car prices to near-record highs,” CoPilot said in a blog post on its “Return To Normal” Index.
“These increases in listing prices show that dealers are still holding out for record profits while they can,” the post added.
The average listing price for used cars jumped to $33,341 in June, up by 0.5% compared to the previous month. Average prices are hovering less than $200 below their peak reached in March.
Prices for both used and new cars have surged over the last year as manufacturers and dealers contend with shortages of key parts and other supply chain woes. Fewer new cars are being produced, prompting increased demand for used cars that has resulted in inventory shortfalls.
Prospective are seeking “nearly new” cars, driving prices in that category up to record highs. Vehicles that were one to three years old are listed at an average of $13,145 higher than their normal projected price. The average list price of $42,314 for those vehicles is an all-time record, according to CoPilot.
“Outside of 1-3 year old vehicles, the older the vehicle, the closer its price to normal levels – although all still have a long way to go,” the company said.
The steep cost of used cars was also revealed in the federal Consumer Price Index for June. Data from the Bureau of Labor Statistics showed used car prices jumped by 7.1% last month year-over-year.
Aside from sticker shock at dealerships and more expensive car loans, motorists are paying near-record prices to fill up their tanks. But the high cost of gas hasn’t stopped demand for used SUVs.
CoPilot noted that the SUVs were listed at a 29% premium compared to their normal price, or $9,768 higher.
CoPilot’s research was derived from a real-time analysis of the “online inventory of virtually every dealer in the country,” according to the blog post.
CNBC was first to report on the survey.